How Money Confident is Britain? January 2022

 Money Confidence Barometer 2022
 
Concerns over inflation and cost of living have more than doubled since the summer, particularly over the cost of groceries, energy and petrol. 
Despite these concerns, the majority of Brits remain confident in their ability to manage their money, choose the right products and make plans for the future.
Particularly high levels of confidence in online banking, with 67% of Brits who use digital services saying they feel more confident with their money.
 
Inflation and the cost of living are the biggest concerns facing over half of Brits at the start of 2022, according to our latest Money Confidence Barometer. With nearly a third of people feeling less confident in their financial situation as a result. 
 
The research, based on responses from more than 5,000 adults, measures the nation’s confidence when it comes to managing their finances. The findings show that 82% of people have already experienced an increase in their costs of living such as increased cost of groceries, day-to-day essentials and gas and electricity.
 
As a result, almost a quarter said they have dipped into savings, one in five said they have changed their usual habits or behaviours such as changing shopping habits and over a third have cut back on spending on non-essential purchases. 
 
19% have increased debt either by taking out new credit, increasing existing credit or going into their overdraft.  
 
Digital banking continues to boost money confidence  
 
Despite these concerns, Brits’ money confidence in managing their money, making plans for the future and choosing the right products and services generally remains consistent with the previous TSB Barometer, while over a third have increased or maintained savings since June 2021.
 
The research also found that 67% of Brits who use online banking feel more confident with their money as a result of being able to: easily check their bank balance, using it to help with budgeting and avoid going into their overdraft. 42% say using online banking helps them save money every month – £166 on average. 
 
More Brits than ever turned to Buy Now Pay Later services
 
The research also shows that more than one in 10 say that they are struggling, with renters making up 83% compared with 15% who are homeowners. Over half of Brits are likely or highly likely to cut back on spending to save money, and 18% may take out a loan.
 
Against this background, Buy Now Pay Later (BNPL) services continue to grow in popularity, with many consumers using Klarna, Clearpay and others to spread payments or pay later. 
 
Research also suggests that some people using BNPL are doing so when they are struggling financially. Of those who use BNPL, 1 in 4 say they rarely have the money in their account to pay for the things they are buying in full. 
 
Mark Curran, Customer Banking Director, at TSB comments: “It’s clear that many people are concerned about the impact of bills going up and rising inflation.  
 
Now is the time to really get on top of your finances and our research shows that many people can save money and budget better by using digital banking. We know that many of our customers need support and we’re delivering new tools and features that will help them to develop confidence with their finances.” 
 
Budgeting tips to help deal with rising costs 
 

1. Find out what you’re really spending.

‚ÄčWith rising prices and bills now is the time to find your where your money really goes. Look through your statements or use the digital tools from your bank to find outgoings like direct debits and subscription services.

2. Don’t delay. 

Don't delay in cancelling payments for anything that you no longer need or looking for cheaper alternatives. Remember to end contracts before cancelling Direct Debits so that you don’t end up with penalty charges.

3. Make use of online banking.

Our research shows that 67% of Brits who use online banking feel more confident with their money as it has enabled them to check their bank balance and avoid going into their overdraft.

4. Try Open Banking. 

Our research shows that those who use Open Banking feel more in control of their finances as they can see all their accounts in one place. 

5. Talk to your bank if you need help.

TSB offers Money Confidence Experts in all its branches.
 
 
The figures are based on research of 5,000 adults in Britain, carried out by Opinium between 8 – 15 December, 2021. Our Money Confidence Barometer.